Running a successful business depends on efficient and accurate finance & accounting operations. In more recent years, numerous organizations have started outsourcing some of these functions to specialized professionals to bring a tremendous benefit to the company. Outsourcing part or all financial processes to a Finance as a Service (FaaS) partner will offer numerous growth opportunities down the line while also allowing the business owner to focus more on the core aspects of the organization.

Several variables can help businesses determine whether they should outsource their finance functions and accounting department. Firstly, a finance and accounting professional can bring a significant advantage to the table through the state-of-the-art technology they use. Second is the issue of whether the organization can or can’t afford a full-time in-house team.

In addition, businesses often consider outsourcing solutions if they can’t find qualified personnel able to do high-value work or if the in-house employees are making too many errors. Resolving these errors is often a time-consuming and expensive process. But by outsourcing these accounting operations to finance professionals, businesses will also take advantage of the multiple layers of review built into the service provider’s workflow, which allows them to keep these errors at a minimum.

Put simply, outsourcing one’s financial operations to a specialized services provider will help overhead and labor cost reduction and have access to better financial leadership for improved business decisions. In addition, it will help with financial stability, relieve the human resources department, and provide for scaling opportunities. That said, not all outsourced providers are the same. Below, we’ll look at what businesses should consider for their outsourced financial business partners to determine whether or not they will be a good fit.

Choosing an Ideal FaaS Outsourcing Provider?

Once a company has decided that outsourcing is the right choice, it’s time to find a partner capable of meeting its finance and accounting requirements.

What Are Your Needs?

Not everyone needs the same level of services from their finance and accounting provider. Businesses need to determine their needs, which can also include the level of security measures required. This will depend on the type of data shared with the outsourced team.

Companies also need to determine whether they also need Controller Services, Financial Planning, and CFO consulting, alongside an accounting core function. These are all factors that need to be determined before searching for an eligible partner can even begin.

In addition, businesses should also consider what specific roles need to be outsourced, which can include things such as bookkeeping, accounting management, tax accounting, payroll processing, financial data analysis, CFO, and more.

Determine Their Technical Expertise

A professional outsourcing service provider should explain their methodology to you when it comes to managing projects, track results, and resolve any issues that may arise. This is important as it helps you understand how your projects will be handled. In addition, they should have a business continuity plan that will ensure they can deliver uninterrupted services to your organization.

How’s The Culture Fit?

When working with a FaaS provider, it’s always best that they are willing to align to your vision and business objectives. Among the best financial service providers are those willing to provide financial visibility through regular reporting. A company’s culture is strongly tied to its own success, and the service provider needs to understand that.

What About their Communications and Client Management?

Businesses need to discuss their expectations with their potential partners so that everyone on the outsourcing team will be available by phone, email, or other communication systems during predetermined times. If operating in different time zones, the outsourced accounting team must ensure that both your working hours align to a certain degree to minimize any communication gaps. The same thing will also apply to have a designated point of contact for any queries, feedback, or concerns.

How’s Their Tech Infrastructure?

Outsourced service providers need to be technologically ready and capable of taking on any financial and accounting responsibilities that may come their way. It’s only by having advanced software and other IT infrastructures such as a reliable network and integrations that they can cover all of your needs and expectations.

What’s Their Reputation?

Once you’ve done a quick overview of their capabilities, it’s time to check their reputation by looking for client references, reviews, and testimonials. Various online platforms offer such reviews from clients that they’ve worked with in the past. Pay attention to the reviews coming from companies that have similar needs to your own. See what they had to say about the finance provider’s performance, quality of work, core competencies, overall collaborative relationship, and staff. Use that information to narrow your selection to a few potential candidates.

The Trial Run

After all of the steps mentioned above have been accomplished, it’s time to put the final FaaS candidates to the test. The best way of doing this is by working with them on a short project, allowing them to present their skills which will enable you to evaluate their performance firsthand properly. When doing this trial run, consider the following:

• Overall Efficiency – What were the outsourced team’s performance and efficiency based on the work given.
• Overall Compatibility – How well the financial services provider works with your in-house staff? Determine if there are any serious communication gaps or barriers that negatively affect your business operations.
• Overall Value – How well do their professional services complement your needs and requirements?

Once the trial project is over, you should have a pretty clear picture of how well that particular outsourcing services provider fits your financial and accounting needs.  The FaaS service provider and/or CPA firm you decide to partner with should understand the financial aspect of your organization while also having sufficient industry knowledge in your niche. By using the best practices and modern software solutions, they should also be able to cover any accounting gaps in your organization.

Consero as Your Finance as a Service Partner

With Consero’s Finance as a Service, businesses can strategically outsource their financial and accounting functions while still maintaining a core finance team. Our services can help organizations bridge the gap between their financial numbers and goals and provide financial stability to smaller and larger organizations.

By increasing financial visibility, companies can also monitor their progress and measure their performance in real-time. In addition, they will be able to improve their risk management and risk mitigation procedures in various scenarios, overcome obstacles, and facilitate business growth.

Unlike simple accounting outsourcing services, Consero’s FaaS also removes the hassle of staying on top of the latest accounting software and employee onboarding. Consero is equipped with state-of-the-art technology and has an established and experienced finance department that has successfully implemented the right resources and mapped out the process numerous times.

By providing both the right tools and human resources that can, in turn, generate accurate data and easy-to-understand reporting, organizations no longer have to design their finance and accounting processes from the ground up. With the system already in place, our customers only need to get into it and have everything up and running within a couple of months. This is in comparison to roughly 18 months it takes to do everything from scratch.

All of this will free up your leadership team, allowing it to focus on more critical business areas. Our Finance as a Service platform collects tremendous amounts of information, while our artificial intelligence technology ensures that everything is up to date, accurate, and correctly automated. Every report generated will be created in an easy-to-read format that even stakeholders with a non-financial background will be able to understand.

Takeaway

As the outsourced financial services industry continues to show its value to organizations of all shapes and sizes, more are willing to outsource more complex financial functions. Instead of just outsourcing basic bookkeeping services, they are now looking for long-term outsourcing relationships with partners that can create IRR forecasts, project valuations, cash flow models, and other complex finance and accounting tasks.

Together with Consero as your partner, you will increase your financial visibility and achieve financial stability while also maintaining your own core finance team. Let’s discuss your FaaS needs and a potential customizable solution by requesting a free demo today!

Regardless of their size or industry, businesses need to have their financial transactions processed without the incidence of fraud or error. They also need to create financial statements, close their books on time, and, if required, create accurate financial reports for their investors.  However, ensuring that all daily operations are running smoothly is not always as straightforward, particularly if the finance team or CFO is constantly distracted by other issues within the organization.

Typically, outsourcing financial and accounting services revolves primarily around transactional processes. That’s because these processes are mainly routine, rule-based, and do not require any in-depth business knowledge. Therefore, these financial services are simple to transfer to an external service provider. And while outsourcing these types of core accounting processes to experts will usually be cost-effective, getting more value-added services from these professionals will often be even more beneficial.

This is where Finance as a Service (FaaS) comes into play. Put simply, FaaS goes one step further, and beyond covering the core competency in the form of transactional bookkeeping and controller services, it will also provide more comprehensive services in the form of financial planning and analysis, as well as strategic CFO support if it is needed.

Today’s middle-market and high-growth businesses require quality insights, timeliness, and financial performance reliability. That said, there are some potential challenges of outsourcing with Finance as a Service.

Determining the Target Scope of Services

Whenever outsourcing services, business owners always need to clearly define which processes and associated activities need to be considered for outsourcing. They also need to undergo an in-depth analysis. This will determine the process flows to accomplish the activities considered for outsourcing. The analysis will also identify the control processes that need to be retained, outsourced, or shared. In addition, this process also needs to include the interfaces with work being done in other parts of the organization.

While this may be true for most outsourcing initiatives, finance and accounting operations (FAO) are typically somewhat decentralized to the different business units and outside of the direct control and supervision of the CFO. As such, due diligence needs to extend into these individual business units. To put the basis for an effective and optimal outsourcing solution, the FAO analysis must identify financial and accounting operating similarities and differences across all business units in the current work structure and identify which processes should be standardized.

Regulatory Compliance

Another perceived challenge that can often prevent companies from outsourcing their F&A processes is the risk related to regulatory compliance such as Sarbanes-Oxley (SOX), HIPPA, or ERISA, among others. While, in the long term, regulatory compliance may accelerate the need for finance and accounting process outsourcing. In time, finance service providers will leverage their expertise to ensure ongoing compliance and change management for their clients’ benefit. If done internally, these activities will likely cost more. However, building trust and confidence is the major challenge going forward.

Indeed, some FaaS providers did not take a proactive approach in supporting their customer organizations in risk avoidance and mitigation activities. Instead of recognizing that helping their customers manage regulatory risk is a basic part of FAO and have those associated costs already built into their solutions from the beginning, they, instead, charge extra for this level of service.

However, there’s no room for any lack of clarity regarding outsourcing governance and the provider’s obligations to assist their customers in meeting regulatory requirements. There’s also very little room for error when it comes to other finance and accounting services as it is. Three significant aspects need to be addressed when it comes to covering regulatory risks. These include:

1. The explicit articulation of both the service provider’s and customer’s roles and responsibilities regarding meeting regulatory compliance.
2. Negotiating a shared-risk arrangement where the vendor is obligated to share in the costs of not meeting the needed regulatory requirements.
3. A collaborative approach towards dealing with risk management.

Outsourcing Costs Higher than Expected

One of the most common challenges in finance and accounting outsourcing is possible “hidden costs.” Suppose a senior financial analyst from the outsourced accounting firm and another one from the customer organization come together to analyze the return on investment for the proposed FAO. In that case, they may come to different conclusions. Most often, the disagreement will arise around the cost of transition and the fees not included in the baseline pricing.

Some F&A managers may have difficulty understanding all the benefits of outsourcing, especially if the initial outsourcing operating costs may be higher than the current run rate. It’s, however, essential to keep in mind that many F&A processes are pretty ingrained into the daily organizational operations. Frequently, there are institutionalized inefficiencies in these traditional processes, such as relying on spreadsheets for system interfaces, having an over-reliance on paper, and more. These need to be addressed when outsourcing services to ensure cost control.

As expected, transforming these inefficient processes to industry best practices will require some up-front investment in time, money, and resources. The pricing will need to reflect this and could be higher than initially expected by the customer. This is especially true if they’ve never actually investigated the cost of these improvements before outsourcing.

In addition, there are the so-called “soft” cost savings that can be difficult to quantify. For example, it’s difficult to put a number on the added value of internal resource redeployment to facilitate timely and accurate business analysis. This type of ROI needs to be recognized, even though it’s often underestimated.

Low Organizational Readiness

Last but not least in this list is the relatively low levels of outsourcing maturity and cultural readiness to accept outside finance organizations as an alternative to internal control of finance and accounting processes. By having limited prior experience with outsourcing, companies may have a challenging time accepting an outsourced provider as part of the team, and their commitment to providing high levels of service to fulfilling business objectives.

Skeptics often wonder if the service provider’s team will be invested enough to respond to emergencies outside working hours. Checking references and testimonials from other customers can corroborate their commitment and level of customer service provided. Suffice to say, without prior experience in outsourcing core business functions to a third party; organizations may be hesitant in making the first step.

In such situations of low organizational readiness towards outsourcing, starting small is often the best approach. No matter how much due diligence and contractual assurance are done beforehand, the fear of the unknown is still difficult to overcome. Unless there are strong cultural leaders ready to back up outsourcing to other stakeholders and see it through to the end, a larger outsourcing initiative is likely doomed.

The fear of regulatory risks, questions around pricing, and uncertainty about scope can be quite challenging to overcome with a large project. Creating a small but successful outsourcing pilot project together with a professional and competent service provider will significantly influence expectations. It will work towards the cultural readiness of a larger FaaS project.

Takeaway

Finance as a Service is a growing trend with more and today’s finance leaders are paying more attention. Similarly, FaaS providers are going through their maturity cycle regarding their service delivery, regulatory compliance, and value-added services.

Nevertheless, the benefits will far outweigh the initial challenges that may arise from first outsourcing the finance and accounting function. In today’s highly competitive and uncertain business environment, outsourced solutions are the perfect way to adapt and even thrive.

With Consero’s Finance as a Service, you will be able to strategically outsource your accounting and finance function while still maintaining your core finance team. This approach will allow our financial experts to support your finance department with a high degree of discretion and accuracy.

In the Age of Rising Cyber Crime: Security and Controls in the Finance Function (Filmed on May 21, 2021)

Panel:
Vinay Pai, SVP of Engineering – Bill.com
Brian Koref, Sr. Director of Information Security – Sage Intacct
Jeanine Nosker, VP of Delivery Transformation – Consero

Host:
Bill Klein, President – Consero

Listen to this Roundtable to learn about best practices in cyber security and hear from experts on what financial systems and internal controls you can impart to mitigate risk in the finance function and protect your business from losing cash.

Client leverages Consero’s Strategic CFO Services to get the finance function in order before they could pursue acquisitions.

Background:

PE-backed enterprise software company was looking at acquisition opportunities. The exec team knew a well managed financial function would contribute to availability of growth capital on attractive terms. They wanted a modern alternative to the traditional in-house solution. Their immediate focus was to complete an audit and get F&A to a place where it could confidently integrate acquisitions. Shortly after onboarding with Consero, client experienced a CFO departure.

The Challenges:

• CEO needed a senior finance leader to support potential capital raise, evaluate acquisition targets and perform ad hoc research projects
• Needed an effective finance function to better integrate acquisition candidates
• High priority concern was cash management and vendor spend
• Not closing the books in a timely manner
• Needed budget and forecast to help guide the business and actionable KPI’s to operate the business effectively
• Needed accurate and timely financial data to be effectively communicated to the board
• Acquisitions would add complexity to the business

Consero’s Finance as a Service Solution

• Quickly stepped in with our seasoned and strategic CFO to manage cash conversion cycle, oversee financial planning, and analyze the financial strengths/weaknesses to propose corrective actions.
• Consero CFO became valued partner to client’s CEO and focused on steering the business by defining and evaluating key metrics while delivering timely month-end close along with audit-ready reporting.
• Led process of negotiation & terms of a spin off.
• Represented client at board meetings and presented financial information with review of the organization’s financial performance, goals and strategic direction of the business.

Client’s Results

• Strategic CFO Guidance: On-demand CFO navigated the business while recognizing risks and opportunities to drive improved profitability and achieve growth objectives.
• Increased CEO Capacity: Consero CFO offered critical evaluation of reporting and interfaced with management team to drive results. CEO could focus more time on strategically impactful projects.
• Improved Decision Making: Increased discipline in the finance function helped to manage cash and vendor spend, get accurate and timely financial information along with critical KPI’s used to make recommendations and drive intelligent business decisions. Board Representation: Consero effectively communicated the financial results to the board with knowledge and insight.

RMS Healthcare is the Managed Services Organization (MSO) that manages the Med First network of clinics. RMS knew its potential as a leading MSO but understood its finance function needed an upgrade to raise the capital for its next wave of acquisitions. This is how Consero, with their Finance as a Service (FaaS) model helped them do just that.

Growth Brings New Challenges

When a private equity sponsor first invested in Med First back in 2016, the value proposition was clear and compelling. As a Managed Services Organization (MSO), Med First provides the administrative functions, including eligibility, billing, verification, HR and legal for a network of primary care and urgent care clinics in rural North and South Carolina, communities traditionally underserved with sparse healthcare options. They allow providers to focus on patients, leading to better health outcomes. MSOs are natural platforms for roll-up acquisitions since there is no shortage of these facilities that could benefit from an administrative upgrade.

But after an initial acquisition spree that grew the company from 9 clinics to 19 under its umbrella today, Med First found itself with having to hire a new CFO. The new CFO, Wes Edwards, had joined Med First after the successful sale of the specialty pharmacy company, Avella. While at Avella, Edwards had a traditional in-house accounting and finance staff.

“Med First had naturally focused on the clinical side of things, because you can’t have a world class organization without solving the problems of patients,” says Edwards. “And with over 150,000 patient interactions a year, there was plenty to do on that front, and plenty to be proud of.”

But Edwards also knew that as CFO, he had to upgrade the finance function. Edwards soon learned that current team couldn’t handle the complex, multi-entity nature of the business. They had moved from QuickBooks to Great Plains, but without optimization. The internal process and infrastructure couldn’t scale, which hindered the sponsor’s ability to manage their portfolio company with the care and agility they usually do. And given the situation, the former CFO devoted substantial time to matters of accounts payable/ accounts receivable, staffing and technology.

Finding a Solution That Scales

By the time they tapped Edwards as CFO, Med First was already considering Consero as an outsourced option for their finance function. But Edwards had come from managing an internal team, and had some success, along with some misses, in that model. “Nobody gets staffing perfect, but I had a good experience with my in-house team,” said Edwards. “Still, Consero looked attractive for solving the staffing burden, but that was only part of the decision to hire them.” Edwards understood that the healthcare sector put unique pressures on the finance team. “There are numerous accounting issues, like being paid by third parties in complicated ways, being underpaid and overpaid, sometimes with missing information, making basic revenue recognition a real challenge to the current team,” said Edwards. And Consero had plenty of experience with this kind of revenue recognition, but that was only one element of the requirement for Consero to modernize the Company’s finance function.
“Med First had a finance function that was operational, but lacked the rigor required to excel at the kinds of audits that would allow the Company to borrow from a bank, or raise further capital,” said Edwards. “And given the desire to build through acquisitions, better financials were one of the keys to our next stage of growth.”
Edwards knew they were in no position to get there with a small staff that needed significant training. “I was blessed with a sparsely filled cupboard, because it made the choice to outsource all the easier,” admits Edwards. The alternative was to spend the next two to three years building and training a team from scratch, and the pace of private equity investments demanded a faster solution.

Getting an Accurate Heartbeat of the Numbers

The partnership with Consero was solidified shortly after Edwards joined with the blessing of the Company’s CEO, Paul Feneck and its Board of Directors. Consero’s skilled team moved quickly to clean up the core finance function, and revamp the monthly close process, shortening the time to complete it. They moved Med First to Consero’s Simpl® software stack that simplified the consolidation process for all those multiple entities. Consero also produced timely and accurate reports for all stakeholders.

“Globally, reporting became a lot less stressful,” said Edwards. When he started, Med First was ostensibly on accrual accounting, but there was still a lot of cash basis situations, and with Consero’s processes and discipline, they’ve been able to accrue all expenses and avoid any timing issues.

“This is a business that really focuses on net revenue per patient visit, so when you’re on a cash basis, that number goes up and down all the time, because of bank holidays, or months with five Fridays or five Mondays, all of which creates fluctuations,” says Edwards. “But now the fluctuations that show up are real and indicate business realities instead of accounting anomalies.”

Edwards notes that financial statements aren’t the most important part of running the business, but they play a key role in understanding the business accurately. “Financial statements are reporting the news, and in this sense, I love reporting the news. With Consero I can start making the news as well, which is something that Med First appreciates.”

Time to Focus on Value-Added Activities

At the company’s current size, Med First hasn’t chosen to invest in a Chief Operating Officer (COO), so that’s a role that gets split between Mr. Feneck and Edwards. “With Consero handling the basics, I’ve got the time to play that ad hoc COO role, and get into things like value-based reimbursement,” said Edwards. “For example, I’m hopping on a conference call with providers tonight to talk about the importance of preventive care, our quality incentive programs and our new compensation models, instead of wrestling to close the monthly books on time.” With Consero on board, Edwards has been able to spend his time on strategic imperatives and now the Company is poised to resume its acquisition strategy, with a number of negotiations already in process. “When I joined, we had several clinics not yet generating positive EBITDA and now we’ve achieved strong consolidated EBITDA and very good clinic margins, which we aim to continue to improve, but there’s no question this was a huge move in the right direction,” said Edwards. “Even more importantly, we’ve earned investors’ confidence that we can continue this progress. That has allowed us to get back to exploring acquisitions.”

In today’s highly disrupted and unpredictable business environment, operating a company, be it a startup or a multinational organization, will come with its series of challenges and rewards. Not surprisingly, finance plays a considerable role in all business operations. From monthly accounts payable/receivables to payroll and everything else in between, an optimized accounting operation is needed within every business.

This is why energy, capital, and resources are spent on training staff, investing in the right tools, and employing qualified accounting professionals to manage these tasks effectively. That said, maintaining in-house finance teams can often prove a costly investment, especially when it comes to middle-market and high-growth businesses.

It’s under these circumstances that outsourcing with Finance as a Service (FaaS) has come into existence, providing businesses with flexible solutions capable of fulfilling their specific needs and requirements while also fitting neatly into their budgets. By outsourcing financial operations, companies are avoiding the large costs associated with hiring additional staff and have access to a dedicated team of financial professionals that are perfectly able to handle daily accounting core functions and more intricate financial tasks.

Outsourcing the finance and accounting function to an expert team of professionals will provide a high degree of flexibility when responding to market volatility and when dealing with cash flow management. It also eliminates the additional cost of training an in-house team or spending on expensive accounting or ERP software.

As businesses grow and scale their operations, they will also have to expand their accounting team, which, in turn, leads to more infrastructure and resources being needed to facilitate the extra team members. These increasing costs can, however, be mitigated by using the services of an outsourced provider,

Another benefit of outsourcing the finance function is that it will help reduce the operational and continuity risk, providing more control over other aspects of the business. Moreover, professional outsourcing firms have the necessary experience in financial planning that can perfectly fit into your other business decisions.

What is Finance as a Service?

Financial and accounting services outsourcing allows businesses to transfer their financial tasks to third-party organizations to focus more on core aspects of the business. Outsourcing financial responsibilities is also an effective way of lowering overhead costs, freeing the company from dealing with processes such as recruiting, hiring, onboarding and training accounting service providers.

A third party will take over all of the time-consuming financial activities for a lower price than the total overhead costs of an in-house team. This is precisely what outsourced financial services are all about. It allows business owners and other team members to focus on adding value and growing the business while getting all of the full-scale services of an entire in-house finance department at only a fraction of the price.

But unlike the traditional outsourced accounting services, Finance as a Service (FaaS) goes a step beyond. A FaaS organization leverages standard operating procedures and combines them with scalable systems, and advanced cloud computing with digital workflows. It increases their agility to meet the specific needs of their partners while also providing easy-to-read financial dashboards and statutory and custom reporting capabilities.

What Outsourcing with FaaS Has to Offer

With the recent technological advancements, the traditional way of doing things may not necessarily be the best way of tackling the company’s finances. By outsourcing their accounting tasks, companies will make use of a professional finance team that’s perfectly able to handle all accounting activities, relieving the organization from the drawbacks of having full-time employees while still enjoying the benefits. But what exactly does Finance as a Service have to offer?

• Finance Professionals – As mentioned, businesses that use FaaS will also have a professional team of finance providers that can assist them at any given moment. There is on-demand access to the expertise and experience of the entire team without having to rely solely on a handful of in-house individuals. Additionally, FaaS also allows companies to customize the services they need, allowing them to cover any accounting gaps that they might have.
• Access to the Latest Finance Services and Processes – For those looking to use state-of-the-art systems and processes while also reducing their operational costs, outsourcing services are the way to go. In today’s digital environment, paper-based processes are more of an obstacle than anything else. A professional Finance as a Service provider will be using the right digital tools to eliminate these processes, improving efficiency while also allowing core staff members to focus on more critical business tasks.
• Cutting-edge Technology – Similar to the point above, an outsourced accounting service provider will surely embrace modern software solutions in the form of cloud computing, artificial intelligence, and advanced analytics, among others. These types of accounting software will eliminate the need for any non-integrated digital tools and traditional spreadsheets. Instead, there will be numerous dashboards that will generate easy-to-understand business intelligence in real-time.
• Timely Reporting – Outsourcing providers also means that there will be a dedicated team ready to handle financial reporting. By combining it with integrated systems that track all metrics and key performance indicators, organizations will have immediate insight into the business finances, wherever needed.

The Benefits of Outsourcing Financial Services

Outsourcing with Finance as a Service can bring numerous benefits to the table. The most common of these benefits include the following:

Scalability

FaaS providers are structured in such a way so they can always allocate the right level of resources to every specific task. By helping companies set up the right systems and streamline their internal controls and processes, FaaS accounting providers can quickly and effectively jump in and help with any accounting activities, allowing the organization to become more scalable in the process.

CFO Support

Many startups and small and medium enterprises (SMEs), don’t have a Chief Financial Officer (CFO). If this is the case, some FaaS providers, such as Consero, can offer CFO support. This is a financial expert who will become part of the company’s team and provide financial guidance. With the FaaS model taking care of many of the repetitive tasks that go into finance and accounting, the company’s financial leadership can focus more on analysis. The CFO comes in to help steer the attention towards the organization’s future growth and provide a more strategic planning trajectory.

Improving Financial Visibility

Spreadsheets and paper-based systems are not only time-consuming but also increase the incidence of human error. As the business grows, leadership needs to gain a bird’s-eye view of the situation on all aspects and segments of the organization. FaaS provides them with financial reporting that presents the current opportunities and challenges facing the company. By improving their financial visibility, companies will better understand their financial situation and better monitor cash flow, make informed business decisions, track their account profitability, monitor customer acquisitions, and more.

Cost Savings

FaaS services can bring on significant cost savings to the organization by comparison to an in-house finance department. And as organizations continue to grow, FaaS cost-effectiveness is only expected to increase. It does this by automating many repetitive tasks, reducing errors related to manual entry and providing a big pool of trained and skilled financial experts, among other such cost-effective benefits.

Additionally, the improved reporting capabilities provided by FaaS can drive business growth. This data is used to drive better decisions, eliminate inefficiencies, and take advantage of the opportunities that may arise.

What to Expect from Finance as a Service?

Outdated systems, inefficient processes, and the wrong team can grind any company’s gears, stifling its potential for growth and success. For many new and/or small organizations, their finance and accounting departments can rarely deliver accurate information to provide any clear insight into their performance. Yet, without this data, business leaders can rarely make the right decisions.

Through strategic finance, businesses can maintain their mission for growth and where their decisions have long-term effects. It’s by responding quickly to today’s unpredictable business environment that organizations can hope to remain relevant. And it’s through forward-looking reporting, precise financial data, and a thorough understanding of the right key performance indicators that business leaders can keep their company on the right track. At the same time, they still need to stay on top of more mundane things such as payroll processing, risk management, cash flow management, documentation automation, and more.

This is why finance and accounting outsourcing can prove to be a cost-effective option. Finance as a Service goes beyond simple accounting outsourcing, delivering process automation, advanced integrated technology, strategic CFO guidance, data analysis, and more. Consero offers services that will give an overview of your financial capabilities, enabling you to plan for the long term.

Every business’s financial transactions need to be processed without the risk of either error or fraud. They also need to condition their daily financial and accounting activities, in the form of creating financial statements, closing books on time, or providing accurate reporting, among others. Yet, if the financial leaders are constantly drawn into the company’s other details, the business often misses tackling these matters effectively.

This is where Finance as a Service (FaaS) comes into play. More than outsourcing back-office and other non-core finance functions, FaaS can provide organizations with enhanced reliability, timeliness, and quality insight into their financial performance. To achieve a similar level of financial management as a multinational enterprise, small and mid-sized organizations have to integrate their financial, accounting, and business strategy streams. That is precisely what FaaS has to offer. It provides middle-market businesses with an enhanced ability to:

• Focus on execution and business continuity.
• Consolidate all of their value streams.
• Gain access to the services of an entire finance team at only a fraction of the cost in terms of overhead costs.

FaaS providers use scalable systems, standard operating procedures, and advanced cloud software, which increases business agility enough to meet any company’s unique needs while also providing them with easy-to-read dashboards alongside custom reporting.

And in light of the COVID-19 pandemic, businesses, while having to contend with various uncertainties, also have the opportunity to build a stronger organization overall. There are several ways that companies can make a nimbler finance function that can support a more informed decision-making process. That said, below are some of the biggest challenges that finance teams have to deal with during Covid-19 and beyond.

The Challenges That Lead to Inefficient Processes

The Covid-19 pandemic has had a significant impact on finance and accounting functions that are not entirely centralized and rely heavily on manual processes. Chief Financial Officers (CFOs) have been experiencing challenges when it comes to:

• Limited access to actionable real-time financial data – When dealing with decentralized systems, putting the correct information together often needs to be done by hand. As such, leadership stakeholders often have to work with outdated information, which can generate limited results.
• Inefficient on-premise systems – With more people working remotely, it has become increasingly challenging to access slow on-premise financial management systems that were not originally designed to support today’s business continuity.
• Cash constraints – Accelerating cash is also a priority for all organizations, no matter their size or industry. Leading functions are often focused on high fixed finance operation costs with little money available for capital expenditure. Businesses can face additional challenges if their working capital is further locked into accounts receivable and accounts payable.
• Staff management – Whether or not the current pandemic affected their demand, companies have still faced additional challenges in protecting their employees from infection, facilitating remote work, and more. This was particularly difficult if their existing infrastructure was unable to support these changes.
• Various operational inefficiencies – Legacy enterprise resource planning systems, poor service placement design, and different siloed processes make it increasingly difficult for businesses to improve their productivity and operating efficiency.

That said, how can finance functions outsourced through Finance as a Service help build business resilience and improve business performance?

The Usefulness of Finance as a Service

Through FaaS, CFOs and their finance teams can design fast responses to emerging organizational needs, generating valuable insight to improve their decision-making process. As an agile and future-oriented service, FaaS combines the best existing finance operations management practices with advanced finance and accounting technology in the form of artificial intelligence, machine learning, automation, and cloud-based ERPs, to achieve their desired goals.

In doing so, companies can achieve faster access to working capital, real-time and accurate forecasts, lower operating costs, and more. It can also help companies standardize many of their repetitive and time-consuming manual processes.

FaaS can also help CFOs by:

• Providing real-time financial data – By consolidating data sources with reporting systems, CFOs have access to a single source of truth that increases the speed and quality of insights, improves cash flow, planning, forecasting, and performance management.
• Digital processes & technologies – Unlike on-premise systems, cloud-based tech is far easier to access remotely.
• Minimal cash outlay – FaaS will reduce the fixed finance operating costs. This means that companies have more cash in hand to increase their ROI.

It’s also important to mention that there was increased demand from both CFOs and the accounting department for more strategy and innovation. This was even before the onset of Covid-19. Senior executives no longer need to spend their working hours on grunt work, especially since today’s digital technology can automate most of these processes.

Traditional finance and accounting processes are quickly becoming obsolete. As such, finance leaders who continue using outdated systems will be placing their organizations at risk. The CFOs’ reputation rides on their ability to plan and implement strategies to drive the company forward. They should be driving innovation and safeguarding their organization against future uncertainties. CFOs can’t afford to waste their valuable time on daily repetitive tasks instead of focusing on client relationships, business intelligence, wealth management, strategy implementation, and more.

Therefore, the future of finance and accounting will be dictated largely by outsourcing through FaaS. It helps lower operating costs, get access to top finance talent, state-of-the-art technology and the experience of finance and accounting professionals.

Is Outsourcing With Finance as a Service Right for Everybody

A common misconception is that businesses would lose control of their department by outsourcing their finance and accounting processes. Yet, when implemented correctly, outsourcing means that an organization will gain a strategic partner capable of supporting the existing finance team while also filling any current operational gaps.

As such, the types of companies that can benefit the most from a FaaS model include:

• SMEs – This model perfectly fits companies with precise accounting needs and growing transaction volumes. This includes startups and small and medium-sized enterprises (SMEs) that also want to have the ability to quickly and effectively scale their operations as their business develops.
• Emerging growth organizations – The FaaS model also works for companies with complex accounting needs and high transaction volumes, requiring a more in-depth financial know-how. FaaS providers offer a wide range of transaction processing and controller-level services.
• Companies sponsored by Private Equity or Venture Capital – FaaS are also excellent for providing executive-level access to CFO services for the most comprehensive financial management partnership in financial guidance and financial reporting for corporate and capital transactions.

Signs You Need Finance as a Service

Several telltale signs often indicate the need for modernizing the finance and accounting function and looking to a Finance as a Service partner. Among these, we can include the following:

• Too much overhead – When companies have difficulty managing their in-house team’s overhead, outsourcing finance and accounting services may be beneficial. Outsourced teams can generate timely financial statements to improve financial visibility and reflect the company’s progress. Outsourcing also eliminates the need for in-house management of hiring, training and other similar time-consuming disruptions.
• Outdated technology – As mentioned, FaaS providers will also provide you with a competitive advantage by using their advanced technology. Those who cannot afford to make such an investment will still have access to cloud-based finance and accounting software to provide accurate financials delivered in real-time.
• Work efficiency – When the quality of the work has to suffer, be it in terms of overall performance or the number and frequency of errors, FaaS can be a worthy option to consider. The quality of work can result from unqualified personnel or staff members who have too much on their plate. In either way, finance as a service is there to see it through.

What Are The Challenges of Outsourcing With FaaS?

Before businesses start considering outsourcing their finance and accounting operations, they should be aware of the potential challenges while undergoing this process.

Knowing What Services to Outsource

One of the most common challenges of outsourcing with a FaaS provider is knowing which services should be outsourced in the first place. Business owners should define which of these processes and associated activities need to be outsourced.

It’s essential to keep in mind that finance and accounting operations are often decentralized to the different business units within an organization. For an effective outsourcing operation to take hold, both similarities and differences between these business units must be identified to know which processes to standardize.

Complying With Regulations

One major issue that often prevents companies from outsourcing their finance and accounting processes is their perceived risk related to regulatory compliance of HIPPA, ERISA, or SOX. And while some FaaS providers will charge extra for this type of service, more professional providers will already have it built into their packages as a basic offering.

It should go without saying that there needs to be absolute clarity when it comes to outsourcing governance. It’s also in the service provider’s own best interest to assist their clients in meeting these regulatory requirements as quickly and as effectively as possible.

Soft ROI

Another common challenge encountered when outsourcing finance and accounting processes are seeing all of the benefits of outsourcing. Some finance and accounting managers have difficulty accurately estimating their operating costs. And switching from outdated systems that are over-reliant on paper-based processes and spreadsheets will have a cost, in terms of both time and money.

That said, it isn’t easy to quantify the added value of internal resource redeployment to facilitate timely and accurate business analysis. This is the type of “soft” ROI that can’t be quantified directly but still needs to be considered, nonetheless.

Organizational Readiness

Another challenge that can be encountered when wanting to outsource with FaaS is the lack of cultural readiness in accepting external finance providers. With limited outsourcing experience, organizations have a tough time in accepting a third party having access to their systems or believe their commitment to providing high levels of service.

In a recent interview with Robert Alvarez, CFO of BigCommerce (BIGC) and two-time winner of the CFO of the Year award, he stated “When I suggest Consero’s Finance as a Service model to someone, I stress that they need to treat them as part of their in-house team, and not merely an outsourced provider.” Bringing your FaaS partner into your company culture becomes an important piece for success.

How to Choose an Ideal FaaS Outsourcing Provider

Since every business is unique, there is no one-size-fits-all approach to the situation. There are, however, several factors that need to be considered when it comes to finding the best Finance as a Service partner capable of meeting all of your needs and requirements.

• Determine Your Needs – The first thing that needs to be considered is your own needs as a business. They need to determine if they also need Financial Planning,& Analysis, Controller Services, and/or CFO consulting, aside from their accounting core functions.
• Their Technical Know-how – Professional outsourcing providers need to explain their methodology when it comes to project management, tracking results, resolving issues, and more. This will help you understand the process and how everything will be handled. Additionally, they should have a business continuity plan that will ensure uninterrupted services.
• Vision Alignment – Another factor that needs to be considered is how well the FaaS provider aligns with your core business objectives. The best situation is when the provider is willing to provide a high level of visibility through regular financial reporting.
• Communication – Likewise, businesses need to talk with the finance provider to determine their availability during predetermined times. This is particularly true if they are operating in different time zones and both teams need to determine if and when working hours alone to minimize any communication gaps.
• Their Technology – Outsourced service providers need to have the right technology capable of tackling any financial and accounting responsibilities that may appear. It’s only through advanced software and IT infrastructures such as reliable networks and integrations that they can cover all of your needs and expectations.
• Their Reputation – Last but not least, businesses should check their future provider’s reputation by looking up online client reviews, references, and testimonials. Check out reviews from companies in your industry and which may have similar needs to your own.

How Consero Global Can Help

Consero Global is one such Finance as a Service provider that can strategically outsource your finance and accounting functions while also allowing you to maintain your strategic financial leadership. Our services help cover any gaps between your financial numbers and your goals – which is a common problem that often leads to business failures.

By increasing your financial visibility, you will also be able to measure progress and monitor performance accurately and in real-time. You’ll also be able to assess the risk in all conceivable scenarios, meet challenges head-on, and overcome any obstacles that stand between you and your business growth.

Finance as a Service also removes the hassle and overhead costs associated with technology research and searching for, hiring, onboarding, and training people. Since Consero is already equipped with state-of-the-art technology and has a team of financial experts, there is no need for our customers to go through the trial-and-error grinding process associated with finding the right team and tools needed to get the job done. We’ve done it hundreds of times, so you don’t have to.

Since we provide both the staff and technology, businesses don’t have to design and document their finance and accounting processes from the ground up, which can take up to 12-18+ months in some cases. We can have everything up and running in one or two months, on average.

In addition, you will have access to our aggregation platform – SIMPL – which combines transaction details, real-time data, support documents, and financial dashboards under the same roof. This data can be accessed remotely by anyone authorized with an internet connection.

Business leaders need forward-looking financial reporting capabilities, clear and real-time financial data, and the right perspective into key performance indicators to respond rapidly to any unforeseen situation. Business leaders will also have to stay on top of their invoice processing, cash flow management, and document automation, among other such processes, while adhering to compliance policies.

This is why finance and accounting outsourcing is a cost-effective solution to meeting the specific requirements of every finance department out there. And unlike your typical outsourced accounting, which is only about moving some non-core business processes to a third party, FaaS is a model that provides far more than that. Finance as a Service delivers integrated advanced technology, process automation, strategic CFO guidance, business strategy cadence, data analysis expertise, and business process engineers.